Section 8 loophole thwarts evacuees hoping to return

TED JACKSON / THE TIMES-PICAYUNESamantha Egana meets her furniture at a storage facility as she finally moves back to New Orleans from Houston. Egana will keep her possessions in storage until she gets her section 8 housing.

Two weeks ago in Houston, two Katrina evacuees hauled the final boxes out of their apartments. But even as their landlords prepared to change their locks, Gina Martin and Samantha Egana couldn't go home to New Orleans, because their Section 8 vouchers were stalled by the Houston Housing Authority.

Despite months of trying, neither could transfer the federal rental assistance back to their hometown.

In theory, Section 8 vouchers are "portable" -- transferable to anywhere in the United States. But many evacuees have had transfers denied or delayed because of a HUD loophole allowing local agencies to reject moves to "higher-rent" areas like New Orleans.

Though all vouchers nationwide are financed by the federal government, the U.S. Department of Housing and Urban Development has set up an elaborate reimbursement system requiring local housing authorities to bill each other when recipients want to move.

HUD rules allow the receiving agency -- in this case, the Housing Authority of New Orleans -- to refuse to pay the rental subsidy for people moving in. That leaves the sending agency -- in this case, the Houston Housing Authority -- on the hook to pay for housing people in other cities.

This has caused a standoff between HANO and housing authorities in other cities, particularly in Texas, which took in many Katrina evacuees. The Housing Authority of New Orleans can't afford to pay for any incoming vouchers, said HUD spokeswoman Donna White. So many out-of-town housing agencies -- facing the prospect of paying rent for all transferring vouchers -- have invoked the "higher rent" exception to refuse New Orleans transfers, including Martin's and Egana's.

Congressional budgets have always allocated a specific number of Section 8 vouchers for each community. To routinely shift each voucher's federal money along with each moving Section 8 family would throw a wrench into that system, meant to address each community's needs, White said.

More than 40,000 Section 8 tenants transfer vouchers nationwide each year, White said. But the agency doesn't track how many of those transfers were to "higher-rent" areas, nor whether the sending or receiving agencies pick up the tab.

Laura Tuggle, head of housing law for New Orleans Legal Assistance, called the idea of portable vouchers "a myth."

"This is a huge national issue -- it's not just us," Tuggle said. She has long battled the issue in smaller numbers, but because so many Katrina evacuees are ready to return, her caseload now consistently includes transfer refusals, she said.

Special Katrina exception

Section 8's low-income recipients typically pay a third of household income toward rent. Some evacuees rejected for transfers are considering a return to New Orleans without assistance, but they fear the city's stiff rents. Others worry that they'll be displaced indefinitely.

"People believe they can't go home," Martin said.

Martin and Egana first exchanged phone numbers in February at the Houston Housing Authority office, after both were refused transfers.

In April, in response to a news report, HUD stepped in to correct the snafu by creating a special exception for hurricane evacuees. Now, housing authorities have no financial incentive to reject transfers because the federal money backing the vouchers follows the families when they move, White said.

After HUD addressed the problem, Martin resumed plans to move home with her two children. Yet despite phone calls, e-mail messages and in-person visits, "my paperwork never moved," she said.

On May 31, when her lease ended, Houston still hadn't faxed the proper forms to New Orleans. Her Houston landlord gave her a 14-day extension, but as the 12th day passed, her documents were nowhere in sight.

"My kids and I will be homeless as of this weekend," she said.

Egana's situation was more complicated.

She faced immediate ouster from her place because Section 8 stopped paying rent to her Houston landlord after a series of inspections failed, primarily because of a cockroach infestation and a broken air conditioner. But even with an eviction hanging over her head, no one could expedite her New Orleans paperwork, Egana said.

And to move without Section 8 approval is considered "abandonment," a voucher-revoking violation that she and Martin were determined to avoid.

Martin, who has worked as an organizer for a human-rights group since Katrina, is calm and calculated. She picks targets, then places strategic calls or sends e-mail messages.

Egana takes a more scattershot approach, blanketing the bureaucracy with calls. If she can't get satisfaction from one person, she'll call three others in that department.

One day when Egana was particularly vexed, she boxed up her all belongings. For two months, her family lived out of suitcases, ready to move home at a moment's notice.

Pleas ignored

Earlier this year, Egana and Martin went to a meeting with hundreds of other evacuees, where Houston Housing Authority officials announced a halt on New Orleans transfers.

At the meeting, Clara Armstrong, 66, pleaded with officials. "They said I could go to somewhere else in Louisiana," she said. "I was crying. I told them that the storm sent me from New Orleans, not Kenner, not LaPlace, not Slidell. New Orleans is where I want to go."

Her pleas ignored, she gave up, thinking she'd have to leave without a voucher or move to a suburb.

Houston's Section 8 program includes 817 displaced Katrina families, according to the Houston Housing Authority, which reserved comment until after an upcoming HUD meeting on the topic with agencies from Houston, San Antonio and Dallas.

Local authorities misused the "higher-rent" exception, said Barbara Sard, housing policy director of the Center on Budget and Policy Priorities and a well-known national expert on housing vouchers. "I'm skeptical that agencies in these cases are justified in refusing to pay the additional cost of New Orleans rent," she said.

To reject a transfer, agencies must show that they would have to terminate one for a local family in order to pay for the transfer, Sard said.

HUD field officers will investigate all claims by Section 8 voucher holders who think they were wrongly denied, said Milan Ozdinec, HUD's deputy assistant secretary of public housing and voucher programs.

"If we find that a housing authority is rejecting a move, and they have the funds, we will take action," he said.

Still, flexibility seems lacking.

HUD officials have declared that their "right to return" policy applies to all HUD-assisted households who were living in New Orleans when Hurricane Katrina hit. That ignores people who first got Section 8 in other cities after being driven from New Orleans by the flood.

Housing authorities also seem to be interpreting "return" strictly. In response to publicized complaints, HUD stepped in this spring to allow Quintellier Jones to move from Houston to higher-rent Baton Rouge, where her family had relocated, including her gravely ill mother.

Houston had contested her "right to return" because she wasn't going to New Orleans, she said.

Former Section 8 recipient Chanel Williams, her 8-year-old son, and her mother are now staying with a niece and family in a one-bedroom apartment in New Orleans because she had to leave her voucher behind in Riverdale, Ga. Officials there had refused her a transfer home to help her mother, who has rheumatoid arthritis, rebuild the family house on St. Andrew Street.

Despite HUD's work on the issue, some clear-cut requests are still denied. On Tuesday, a Houston caseworker told evacuee Melissa Hunter that the agency wasn't transferring anyone to New Orleans.

Unacceptable, said Ozdinec, taking down Hunter's name. HUD has made it "crystal clear" that agencies should do everything possible to help displaced families return to New Orleans, he said.

Home at last

Egana and Martin are now back home, thanks to help from HUD's Washington office, which stepped in to get them out of Houston.

But HANO caseworkers have warned Martin and Egana that they still face a month of waiting: two weeks for inspection and two weeks more for a Section 8 contract.

At the least, everything should be ironed out before August, when Martin heads to Tulane University and her two children start at Delgado Community College. Egana and family are piled up with relatives while she looks for apartments and jobs. "This move is a struggle financially," she said. But the end goal -- being back in New Orleans -- is worth extra effort, she said.

"This is somewhere I was born and raised," she said. "For me, this is home."

Katy Reckdahl can be reached at kreckdahl@timespicayune.com or 504.826.3396.